The Nifty reclaimed 25,000 on Friday, but rising geopolitical tensions could test investor nerves. Analysts flag 25,220 as a key resistance zone for the index.
The Nifty reclaimed the crucial 25,000 levels on Friday, raising hopes of renewed strength in the benchmark indices. However, on Sunday, the U.S. struck three Iranian nuclear sites, amidst the escalating geopolitical tensions in the Middle East.
Markets are bracing for potential risk-off selling as they resume trade on Monday. The GIFT Nifty indicated a weak start for Dalal Street.
SEBI-registered analyst Rajneesh Sharma noted that as markets open on Monday, retail panic driven by gap-downs, oil price spikes, and alarming headlines may dominate sentiment, creating discounted entry points that institutions are likely to exploit.
On Nifty, he observed that the index’s technical structure before the escalation was bullish. On Friday, the index reclaimed the 21-day EMA and 50-day SMA on the weekly chart, and the ADX at 13 showed a breakout potential.
Sharma emphasized on a key level: If the Nifty closes the week ending June 27 in the green, the bullish setup remains intact. This week will be crucial in differentiating between transient market noise and the underlying narrative.
Analyst Harika Enjamuri believes the index is approaching a tight resistance zone between 25,120 and 25,220. She observed that short-term indicators, like the 5-minute and 15-minute charts, show an uptrend, with the 9, 70, and 100 Exponential Moving Averages (EMA) stacked positively, reinforcing bullish momentum.
The Relative Strength Index on the 15-minute chart at 64 signals continued buying strength but also suggests possible short-term exhaustion near resistance.
Enjamuri noted that a decisive breakout above 25,220 may lead to fresh highs toward 25,300–25,360, while any failure to sustain above 25,020 could trigger minor profit booking, pulling the index toward 24,965 and 24,880. Dips around 25,000–25,020 backed by strong volume could offer low-risk long setups.
She concludes that the short-term trend remains bullish, but traders should monitor 25,220 closely for a potential breakout or reversal. Until then, buy-on-dips near support remains the preferred strategy.
Kush Ghodasara highlighted two scenarios for the Nifty index this week.
On the bullish front, Nifty managed to close above the 10-15 day average resistance at 24,950, which now serves as near-term support. And the momentum indicator, RSI, has shown a bullish internal crossover, raising the potential for further rally. In this scenario, Ghodasara suggests buying above 25,150, targeting 25,450 and 25,900, with a stop loss set at 24,850.
From a bearish perspective, the Nifty closed at the 25,150 resistance level, which has acted as a strong barrier on three previous occasions. The 25,200 (recent high) is the 78.6% retrenchment resistance of the last major fall (from 26,277 to 21,743) looms large. Last week’s trading range was confined within the previous week’s range, raising concerns over the strength of the move.
In this case, he noted that the bearish strategy would involve selling below 24,950, with targets at 24,650 and 24,250, and a stop loss at 25,277.
The big question this week remains: was Friday’s breakout a corrective move or does it signal the start of a new rally?
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